Terreno Realty Corporation Announces Quarterly Operating, Investment and Capital Markets Activity

  • 97.3% quarter end occupancy compared to prior quarter of 96.7% and prior year of 97.4%
  • 97.5% quarter end same store occupancy compared to prior quarter of 97.5% and prior year of 98.9%
  • 7.1% increase in cash rents on new and renewed leases for the quarter; 10.8% for the full year 2017
  • $105.1 million of acquisitions during the fourth quarter comprising approximately 551,000 square feet; full year 2017 acquisitions of $292.7 million
  • Sold one property for approximately $11.5 million during the fourth quarter; full year 2017 dispositions of $77.3 million
  • 817,158 shares of common stock issued under ATM during the fourth quarter for gross proceeds of $30.8 million; 7,859,929 shares of common stock issued during the full year 2017 for gross proceeds of $255.3 million

SAN FRANCISCO--()--Terreno Realty Corporation (NYSE:TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, announced today its operating, investment and capital markets activity for the fourth quarter and full year of 2017.

Operating

As of December 31, 2017, Terreno Realty Corporation owned 196 buildings aggregating approximately 13.0 million square feet and ten improved land parcels consisting of 47.9 acres. Key operating measures for the portfolio were as follows:

  • The total portfolio was 97.3% leased to 426 tenants as compared to 96.7% at September 30, 2017 and 97.4% at December 31, 2016;
  • The same store portfolio of approximately 10.2 million square feet was 97.5% leased at December 31, 2017 as compared to 97.5% at September 30, 2017 and 98.9% at December 31, 2016; and
  • Cash rents on new and renewed leases totaling approximately 0.4 million square feet commencing during the fourth quarter increased approximately 7.1%. Cash rents on new and renewed leases totaling approximately 1.6 million square feet commencing during the full year 2017 increased approximately 10.8%.

Investment

During the fourth quarter of 2017, Terreno Realty Corporation acquired seven industrial properties consisting of fourteen buildings of approximately 551,000 square feet and one improved land parcel of 5.4 acres for an aggregate purchase price of approximately $105.1 million. The fourth quarter investment activity was as follows:

  • 5540 W 104th Street: One industrial distribution building containing approximately 20,000 square feet on 1.0 acre in Los Angeles, California, west of Interstate 405 and immediately adjacent to Los Angeles International Airport. The property has four dock-high loading positions, parking for 39 cars, and is 100% leased to one tenant. The purchase price was approximately $4.8 million with an estimated stabilized cap rate of 4.5%;
  • 1480 NW 94th Avenue: One industrial distribution building containing approximately 38,000 square feet on 3.3 acres in Doral, Florida. The property is located in Miami’s Airport West submarket, provides 10 dock-high and one grade-level loading positions, parking for 49 cars and is 100% leased to one tenant. The purchase price was approximately $6.8 million with an estimated stabilized cap rate of 5.4%;
  • NW 70th V: One industrial distribution building that after renovation will contain approximately 59,000 square feet on 3.2 acres in Miami, Florida. The property is located at 1775 NW 70th Avenue and is immediately adjacent to Miami International Airport and four existing Terreno Realty Corporation properties on NW 70th Avenue. The property provides 10 dock-high and one grade-level loading positions, parking for 148 cars and is 100% leased to one tenant on a short-term basis. The purchase price was approximately $8.4 million with an estimated stabilized cap rate of 5.4%;
  • Dominguez: One 5.4-acre improved land parcel 100% leased on a short-term basis and located at 2315 E Dominguez Street in Carson, California. The property is approximately one mile from the intersection of Interstates 405 and 710 in the South Bay submarket between Los Angeles International Airport and the ports of Los Angeles and Long Beach. The property was purchased for approximately $12.9 million with an estimated stabilized cap rate of 5.4%;
  • 1855 West 139th Street: Two industrial distribution buildings containing approximately 231,000 square feet on 11.1 acres in Gardena, California. The property is located at 1855 West 139th Street, south of Interstate 105 and between Interstates 405 and 110. The property provides 24 dock-high and three grade-level loading positions, parking for 163 cars and is 100% leased to one tenant. The purchase price was approximately $37.6 million with an estimated stabilized cap rate of 4.2%;
  • Hawthorne: One distribution and seven flex industrial buildings containing approximately 152,000 square feet on 6.9 acres in Hawthorne, California. The property is located at 3355-3437 W. El Segundo Boulevard, adjacent to Interstate 105 and approximately three miles east of Los Angeles International Airport. The property provides ten dock-high and 29 grade-level loading positions, parking for 225 cars and is 100% leased to 19 tenants, four of which are month-to-month. The purchase price was approximately $27.6 million with an estimated stabilized cap rate of 4.4%; and
  • New Dutch: One industrial distribution building containing approximately 51,000 square feet on 5.6 acres in Fairfield, New Jersey. The property is located at 40 New Dutch Lane and is adjacent to Interstate 80 and U.S. Route 46. The property provides five dock-high and six grade-level loading positions, parking for 71 cars and is 100% leased to one tenant. The purchase price was approximately $7.2 million with an estimated stabilized cap rate of 5.4%.

Terreno Realty Corporation’s acquisition activity for the full year 2017 included 23 industrial properties consisting of 35 buildings with approximately 1.7 million square feet and five improved land parcels totaling approximately 25.1 acres for an aggregate purchase price of $292.7 million.

During the fourth quarter of 2017, Terreno Realty Corporation sold one 135,000 square-foot distribution building in Maryland’s Baltimore/Washington corridor for approximately $11.5 million generating an unleveraged internal rate of return of approximately 11.9%. The property was 44% leased to one tenant at disposition. Dispositions for the full year 2017 included four properties sold at an aggregate sales price of approximately $77.3 million generating an unleveraged internal rate of return of 13.7%. Capital from such sales is recycled into properties that Terreno Realty Corporation expects to provide better prospective returns.

Terreno Realty Corporation has approximately $110.1 million of acquisitions under contract aggregating approximately 626,000 square feet and one improved land parcel of approximately $6.3 million under letter of intent. Terreno Realty Corporation has one property under contract for sale for approximately $19.0 million containing approximately 113,000 square feet. There is no assurance that Terreno Realty Corporation will acquire or dispose of the properties under contract or letter of intent because the proposed acquisitions and disposition are subject to the completion of satisfactory due diligence, closing conditions and, in the case of letters of intent, contracts.

Capital Markets

During the fourth quarter of 2017, Terreno Realty Corporation issued 817,158 shares of common stock with a weighted average offering price of $37.72 per share, receiving gross proceeds of $30.8 million under the Company’s at-the-market equity offering program. For the full year 2017, Terreno Realty Corporation issued 7,859,929 shares of common stock with a weighted average offering price of $32.48 for gross proceeds of $255.3 million under the Company’s at-the-market equity offering program. Terreno Realty Corporation did not repurchase any shares of common stock pursuant to the Company’s share repurchase authorization.

Additional information is available on the company’s website at www.terreno.com. Terreno Realty Corporation expects to file its annual report on Form 10-K for the period ended December 31, 2017 on or about February 7, 2018.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “result,” “should,” “will,” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2016 and our other public filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts

Terreno Realty Corporation
W. Blake Baird or Michael A. Coke, 415-655-4580

Release Summary

Terreno Realty Corporation Announces Quarterly Operating, Investment and Capital Markets Activity

Contacts

Terreno Realty Corporation
W. Blake Baird or Michael A. Coke, 415-655-4580